ITO TDS 3 (1)(1), MUMBAI v. RAYMOND HOMI KERMANI, MUMBAI

ITA 7097/MUM/2014 | 2011-2012
Pronouncement Date: 30-09-2016

Appeal Details

RSA Number 709719914 RSA 2014
Assessee PAN AAPPK3340Q
Bench Mumbai
Appeal Number ITA 7097/MUM/2014
Duration Of Justice 1 year(s) 10 month(s) 3 day(s)
Appellant ITO TDS 3 (1)(1), MUMBAI
Respondent RAYMOND HOMI KERMANI, MUMBAI
Appeal Type Income Tax Appeal
Pronouncement Date 30-09-2016
Appeal Filed By Department
Bench Allotted D
Tribunal Order Date 30-09-2016
Assessment Year 2011-2012
Appeal Filed On 26-11-2014
Judgment Text
D IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES D MUMBAI BEFORE SHRI SANJAY GARG JUDICIAL MEMBER AND SHRI ASHWANI TANEJA ACCOUNTANT MEMBER ITA NO.7097/MUM/2014 ASSESSMENT YEAR: 2011-12 ITO TDS 3(1)(1) R.NO.139 1 ST FLOOR SCINDIA HOUSE BALLARD PIER N.M. ROAD MUMBAI-38 / VS. MS. RAYMOND HOMI KERMANI ARVIND SANGAVE & CO. 37-4/ SHAVIRI PREMISES CHS LTD. R.S. SAPRE MARGE PRINCES STREET MUMBAI-400002 ( REVENUE ) ( RESPONDENT ) P.A. NO . AAPPK3340Q REVENUE BY SHRI B.S. BIST (SR. DR) RESPONDENT BY SHRI R.K. KOTAIN (AR) $ % & '( / DATE OF HEARING : 26/09/2016 & '( / DATE OF ORDER: 30/09/2016 / O R D E R PER ASHWANI TANEJA (ACCOUNTANT MEMBER): THIS APPEAL HAS BEEN FILED BY THE REVENUE AGAINST T HE ORDER OF LD. COMMISSIONER OF INCOME TAX (APPEALS) MUMBAI- 10 {(IN SHORT CIT(A)} DATED 28.08.2014 PASSED AG AINST RAYMOND HOMI KERMANI 2 ASSESSMENT ORDER U/S 143(3) DATED 28.11.2013 FOR T HE ASSESSMENT YEAR 2011-12 ON THE FOLLOWING GROUNDS: 1.ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW THE LD. CIT(A) ERRED IN ALLOWING THE CLAIM OF EXEMPTION U/S 54 OF THE I.T. ACT BY THE ASSESSEE FOR THE INVE STMENT OF RS. 1 70 00 000/- BEING THE SALE CONSIDERATION OF IMMOVABLE PROPERTY IN INDIA IN BUYING THE RESIDENT IAL APARTMENT IN NEW ZEALAND OF RS.1 68 17 223/- WITHOU T APPRECIATING THE FACT THAT THE EXEMPTION IS AVAILAB LE ONLY WHEN INVESTMENT IS CARRIED OUT IN INDIA. 2.ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW THE LD. CIT(A) ERRED IN RELYING ON THE DECI SION OF MUMBAI TRIBUNAL IN THE CASE OF MRS. PREMA P. SHAH & SANJIV P. SHAH VS. ITO(100 ITR 60(MUM)) WITHOUT APPRECIATING THE FACT THAT REFERENCE APPEAL U/S 260 A OF THE I.T. ACT WAS EARLIER PREFERRED BUT LATER ON WITHD RAWN IN THIS CASE ON THE GROUND OF LOWER TAX EFFECT AND NOT ON MERIT. 3.ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW THE LD. CIT(A) ERRED IN ALLOWING THE EXEMPT ION U/S 54 OF THE I.T. ACT FOR THE CAPITAL GAIN ARISING FROM THE SALE OF RESIDENTIAL PROPERTY IN INDIA IN INVEST ING THE SAME IN THE RESIDENTIAL APARTMENT AT 31 FINNET Y AVE HOWICK AUCKLAND NEW ZEALAND WITHOUT APPRECIATING THE FACT THAT CLAIM OF EXEMPTION OF SE CTION 54F OF THE I.T. ACT HAS NOT BEEN ALLOWED BY THE AHMEDABAD ITAT IN THE CASE OF LEENA J SHAH 6 SOT 721(ITO AHMEDABAD) 2. DURING THE COURSE OF HEARING ARGUMENTS WERE MADE B Y SHRI R.K. KOTAIN AUTHORISED REPRESENTATIVE (AR) ON BEHALF OF THE ASSESSEE AND BY SHRI B.S. BIST DEPARTMENTAL REPRESENTATIVE (SR. DR) ON BEHALF OF THE REVENUE. 3. THE ONLY GROUND TO BE ADJUDICATED BY US IS WHETHER THE ASSESSEE WILL BE ELIGIBLE TO CLAIM DEDUCTION U/S 54 OF THE ACT FOR MAKING INVESTMENT IN ACQUIRING A HOUSE LOCATED ABROAD IN RAYMOND HOMI KERMANI 3 AUCKLAND NEW ZEALAND AGAINST THE SALE PROCEEDS OF RESIDENTIAL HOUSE SOLD BY THE ASSESSEE IN INDIA. 3.1. DURING THE IMPUGNED ASSESSMENT YEAR THE DEDUCTION HAS BEEN DENIED BY THE AO WHICH WAS SUBSEQUENTLY ALLOWE D BY THE LD. CIT(A). DURING THE COURSE OF HEARING LD. DR RE LIED UPON THE ORDER OF AO AND SUBMITTED THAT OBJECT OF THE LE GISLATION WAS TO PROMOTE HOUSING IN INDIA AND THEREFORE ANY I NVESTMENT MADE IN ACQUIRING THE RESIDENTIAL HOUSE OUTSIDE IND IA SHOULD NOT BE ELIGIBLE UNDER THE LAW FOR DEDUCTION U/S 54. 3.2. PER CONTRA LD. COUNSEL OF THE ASSESSEE SUBMITTED THAT THERE IS NOTHING IN SECTION 54 WHICH PROHIBITS INVE STMENTS INTO HOUSE PROPERTY LOCATED OUTSIDE INDIA AND THEREFORE DEDUCTION HAS BEEN RIGHTLY ALLOWED BY LD. CIT(A). IT WAS FURT HER SUBMITTED BY HIM THAT ISSUE IS COVERED IN FAVOUR OF THE ASSESSEE ON THE BASIS OF VARIOUS JUDGMENT OF THE TR IBUNAL. HE PLACED RELIANCE UPON THE FOLLOWING DECISIONS OF THE TRIBUNAL: 1. ITO V. SHRI FAROKH JAL DEBOO (ITA NO.4650 & 3478/MUM/2013 DATED 05.02.2016 ITAT MUMBAI) 2. SHRI N. RANGANATHAN V. ITO (ITA NO.863/MDS/2014 DATED 26.06.2014 ITAT CHENNAI) 3. MR. GIRDHAR MOHANANI V. ITO (ITA NO. 4591/MUM/20 13 DATED 06.05.2015 MUMBAI) 3.3. WE HAVE CONSIDERED THE SUBMISSIONS MADE BY BOTH TH E SIDES AS WELL AS JUDGMENTS PLACED BEFORE US. THE BR IEF BACKGROUND AS CULLED OUT FROM THE ORDER OF THE LOWE R AUTHORITIES IS THAT THE ASSESSEE IS A NON-RESIDENT INDIAN SETTLED IN NEW ZEALAND. DURING THE COURSE OF ASSESSMENT PRO CEEDINGS IT WAS NOTED BY THE AO THAT DURING THE YEAR ASSESSE E HAD SOLD RAYMOND HOMI KERMANI 4 HIS RESIDENTIAL PLOT AT DADAR(E) MUMBAI AND CLAIME D DEDUCTION U/S 54 ON ACCOUNT OF UTILIZATION OF SALE PROCEEDS INTO ACQUISITION OF A RESIDENTIAL PLOT AT AUCKLAND NEW ZEALAND. THE AO ISSUED SHOW CAUSE NOTICE TO THE ASSESSEE. TH E ASSESSEE SUBMITTED REPLY AND JUSTIFIED ITS CLAIM BY RELYING UPON THE DECISION OF THE TRIBUNAL IN THE CASE OF MR S. PREMA P. SHAH V. ITO 282 ITR 211 (ITAT MUMBAI). BUT AO WAS NOT SATISFIED WITH THE REPLY BY THE ASSESSEE. IT WAS OB SERVED BY HIM THAT WHILE DRAFTING BENEFICIAL PROVISIONS OF SE CTION 54 THE INTENTION OF THE LEGISLATURE WAS NEVER TO PROMOTE H OUSING CONSTRUCTION ACTIVITIES OUTSIDE INDIA AND THEREFORE THE CLEAR INTENTION WAS TO ALLOW THE DEDUCTION ONLY IF THE SA LE PROCEEDS WERE UTILIZED INTO ACQUIRING/CONSTRUCTING A RESIDEN TIAL HOUSE IN INDIA. HE ALSO DISTINGUISHED THE JUDGMENT OF MRS . PREMA P. SHAH AS WAS RELIED UPON BY THE ASSESSEE BEFORE HIM. HE RELIED UPON THE ANOTHER JUDGMENT OF THE TRIBUNAL IN THE CA SE OF LEENA J. SHAH V. CIT (ITA NO. 206/2006 BY ITAT AHMA DABAD) WHEREIN IT WAS HELD THAT DEDUCTION WOULD BE ALLOWAB LE ONLY IF NEW HOUSE WAS LOCATED IN INDIA AND THUS RELYING UPO N THE SAID JUDGMENT HE DENIED THE BENEFIT OF DEDUCTION. 3.3. BEING AGGRIEVED THE ASSESSEE FILED AN APPEAL BEFOR E LD. CIT(A) AND FILED EXHAUSTIVE DETAILS AND EVIDENCES T O SUBSTANTIATE ITS CLAIM. THE ASSESSEE SUBMITTED THAT AS PER LAW AS CONTAINED IN SECTION 54 THERE IS NO RESTRICTION UPON ACQUIRING THE HOUSE LOCATED OUTSIDE INDIA. THE EVID ENCE WITH REGARD TO ACQUISITION OF HOUSE WAS ALSO SUBMITTED AFTER CONSIDERING THE DETAILS AND EVIDENCES SUBMITTED BY THE RAYMOND HOMI KERMANI 5 ASSESSEE. THE LD. CIT(A) DECIDED THIS ISSUE IN FAVO UR OF THE ASSESSEE BY INTER-ALIA OBSERVING AS UNDER: I HAVE CONSIDERED THE A.OS ORDER AS WELL AS THE A PPELLANT ARS SUBMISSIONS. HAVING CONSIDERED BOTH AND ALSO A FTER TAKING NOTE TO THE AMENDMENT TO SECTION 54 AND 54F BY FINANCE (NO.2) ACT 2014 IN THE INCOME TAX ACT AND ALSO AFTER TAKING NOTE TO THE JUDICIAL PRECEDENTS/DECISI ONS CITED BY THE APPELLANTS AR IN THE SUBMISSION I AM OF TH E CONSIDERED VIEW THAT THE A.O. WAS NOT CORRECT IN HI S ACTION WHILE DENYING THE CLAIM OF DEDUCTION U/S 54 OF THE ACT TO THE APPELLANT MERELY ON THE REASON THAT THE APPELLA NT HAS MADE SUBSEQUENT INVESTMENT FOR MAKING CLAIM OF DECU TION U/S 54 OUTSIDE INDIA. HAVING TAKEN NOTE TO THE AMEN DMENT IN SECTION 54/54F BY FINANCE ACT 2014 IT IS EVIDE NT THAT THE SAID DENIAL OF DEDUCTION BY THE AO IS COMPLETEL Y INCORRECT AND UNJUSTIFIED. HAVING TAKEN NOTE TO THE SAID AMENDMENT TO SECTION 54 WHEREIN IN SUB-SECTION (1) FOR THE WORDS CONSTRUCTED A RESIDENTIAL HOUSE THE WORDS CONSTRUCTED ONE RESIDENTIAL HOUSE IN INDIA SHALL BE SUBSTITUTED WITH EFFECT FROM 1 ST APRIL 2015. THIS LEGISLATIVE CLARITY OF THE LEGISLATION IN THE RESPECTIVE SECTIO N I.E. SECTION 54 CLEARLY ESTABLISHES THAT THE SAID RESTRICTION OF INVESTMENT OF CAPITAL GAIN TO BE MADE IN INDIA IN RESIDENTIAL HOUSE WILL MERELY BE APPLICABLE AFTER 01.04.2015. 10. THEREFORE IN MY CONSIDERED VIEW THE ACTION OF THE APPELLANT IN MAKING THE INVESTMENT OUTSIDE INDIA IN ACQUIRING THE SAID RESIDENTIAL HOUSE FOR HIS OWN PU RPOSE QUALIFIES UNDER THE PROVISIONS OF LAW FOR DEDUCTION U/S 54 OF THE ACT. MY DECISION ON THIS GETS SUPPORT FROM T HE DECISION OF THE JURISDICTIONAL MUMBAI ITATS DECIS ION IN THE CASE OF MRS. PREMA P. SHAH & SANJIV P. SHAH V. ITO [100 ITD 60(MUM)] AND ITO V. GIRISH M. SHAH IN ITA NO.3582/MUM/2009. FURTHER EVEN I FIND THAT ANOTHER JUDGMENT OF ITAT BANGALORE BENCH IN THE CASE OF VI JAY MISHRA VS. CIT IN IT APPEAL NO.895(BANG.) OF 2012 A LSO SUPPORTS MY AFORESAID DECISION. EVEN WHILE HOLDING MY DECISION IN FAVOUR OF THE APPELLANT BASED ON AFORES AID REASONING I ALSO DERIVE STRENGTH WITH THE JUDGMENT IN THE CASE OF CIT VS. T.N ARVINDA REDDY REPORTED IN 120 ITR 46(SC) WHEREIN THE HONBLE JUDGE OF THE SUPREME COU RT OF RAYMOND HOMI KERMANI 6 INDIA JUSTICE V.R. KRISHNA IYER OBSERVED IF YOU SE LL YOUR HOUSE AND MAKE A PROFIT PAY CEASER WHAT IS DUE TO HIM BUT IF YOU BUY OR BUILD ANOTHER SUBJECT TO THE CON DITIONS OF SECTION 54(1) YOU ARE EXEMPT. THUS I CONSIDER IT PROPER AND APPROPRIATE TO DIRECT THE AO TO ALLOW THE DEDUC TION U/S. 54 OF THE ACT TO THE APPELLANT AS CLAIMED. IN THE RESULT THE APPELLANTS APPEAL IS ALLOWED. 3.4. THUS IT IS NOTED FROM THE ABOVE THAT LD. CIT(A) H AS CONSIDERED THE AMENDMENT MADE IN SECTION 54 WHEREIN RESTRICTION HAS BEEN BOUGHT INTO THE STATUTE BY THE LEGISLATURE FOR LOCATION OF NEW RESIDENTIAL HOUSE IN INDIA W. E.F. 01.04.2015. THE AMENDMENT HAS BEEN HELD TO BE PROSP ECTIVE AND THEREFORE IT IS NOT APPLICABLE ON THE FACTS OF THE CASE BEFORE US WHEREIN IMPUGNED ASSESSMENT YEAR IS 2011-12 AND NEW RESIDENTIAL HOUSE HAS BEEN PURCHASED ON 1 ST JUNE 2011. FURTHER RELYING UPON THE VARIOUS DECISIONS OF THE TRIBUNAL IT WAS HELD BY THE LD. CIT(A) THAT SECTION 54 SHALL BE ELIGIBLE TO THE ASSESSEE IN THIS CASE. IT IS FURTHER NOTED BY U S THAT BEFORE US LD. COUNSEL OF THE ASSESSEE HAS RELIED UPON MAN Y JUDGMENT OF THE TRIBUNAL ON THIS ISSUE AND CLAIMED THE ISSUE BEFORE US AS COVERED WITH THESE JUDGMENTS. 3.5. WE HAVE GONE THROUGH THESE JUDGMENTS AND FIND FORC E IN THE CONTENTION OF THE LD. COUNSEL. IT IS NOTED THAT COORDINATE BENCH IN THE CASE OF FAROKH JAL DEBOO (SUPRA) AS RE CENTLY ANALYZED ENTIRE LAW AVAILABLE ON THIS ISSUE AND AFT ER CONSIDERING VARIOUS JUDGMENT AVAILABLE AS ON DATE A S WELL AS PROVISIONS OF LAW AND ALSO THE AMENDMENT MADE IN TH E LAW HELD THAT ASSESSEE IS ELIGIBLE FOR DEDUCTION U/S 54 ON ACCOUNT OF INVESTMENT IN ACQUIRING RESIDENTIAL HOUSE LOCATE D OUTSIDE RAYMOND HOMI KERMANI 7 INDIA. RELEVANT PART OF OBSERVATION OF THE BENCH IS REPRODUCED BELOW: 4.3.1 WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED AND CAREFULLY CONSIDERED THE MATERIAL ON RECORD INCLUDING THE JUDICIAL PRONOUNCEMENTS CITED AND PLACED RELIANCE UPON. WE FIND THAT A SIMILAR ISSUE HAS ALREADY BEEN DECIDED IN THE CASE OF MS. DHUN JEHAN CONTRACTOR IN ITA NO. 7058/MUM/2013 DATED 13.05.2015. IN THAT CASE THE COORDINATE BENCH AFTER CONSIDERING THE FACTS OF THAT CASE AT PARA 2 THEREOF ALLOWED THE ASSESSEE'S CLAIM FOR EXEMPTION UNDER SECTION 54 OF THE ACT ON ACCOUNT OF INVESTMENT IN THE ACQUISITION OF A NEW PROPERTY OUTSIDE INDIA. IN DOING SO THE COORDINATE BENCH FOLLOWED THE DECISION OF ANOTHER COORDINATE BENCH OF THIS TRIBUNAL IN THE CASE OF GIRDHAR MOHANANI AND SMT. VARSHA GIRDHAR IN ITA NOS. 4591 & 4592/MUM/2013 DATED 06.05.2015. IN ITS ORDER IN THE CASE OF MS. DHUN JEHAN CONTRACT OR (SUPRA) THE COORDINATE BENCH AT PARAS 6 & 7 THEREOF HELD AS UNDER: - '6. HAVING CONSIDERED THE RIVAL SUBMISSIONS AS WELL AS THE RELEVANT MATERIAL ON RECORD WE FIND THAT A SIM ILAR ISSUE HAS ALREADY BEEN DECIDED BY THE COORDINATE BENCH OF THE TRIBUNAL IN THE CASE OF MR. GIRDHAR MOHANANI & MRS. VARSHA GIRD HAR IN ITA NOS.4591 & 4592/MUM/2013 DECIDED ON 06.05.15 AND THE RELEVAN T FINDING IN PARAS 4 TO 9 IS AS UNDER: '4. WE HAVE CONSIDERED RIVAL CONTENTIONS AND FOUND THAT DURING THE YEAR ASSESSEE HAS CLAIMED EXEMPTION U1S. 54. OUT OF THE SALE CONSIDERATION OF RS.87 37 2911- AS SESSEE HAS DEPOSITED RS.50 LAKHS IN CAPITAL GAINS IN SCHEM E ACCOUNT. SUBSEQUENTLY DEPOSIT WAS WITHDRAWN DURING THE ASSESSMENT YEAR 2010- 2011 UNDER CONSIDERATION AND WAS INVESTED IN A FLAT IN DUBAI. AS PER AO ASSESSEE WAS NOT ENTITLED FOR CLAIM OF EXEMPTION U/ S. 54 IN RESPECT OF INVESTMENT MADE IN HOUSE PROPERTY OUTSIDE INDIA. 5. IT WAS CONTENDED BY ID. DR THAT CIT(A) HAS ALREADY CONSIDERED THE DECISION IN THE CASE OF DR. GIRISH M . SHAH MRS.PREMA P. SHAH LEENA P. SHAH WHEREIN IT WAS IT A NO. RAYMOND HOMI KERMANI 8 7058/M12013 MS. DHUN JEHAN CONTRACTOR 4 HELD THAT EXEMPTION IS PERMISSIBLE EVEN IF INVESTMENT IN NEW RESIDENTIAL HOUSE IS MADE OUTSIDE INDIA. 6. ON THE OTHER HAND ID. AR RELIED ON THE DECISION OF BANGALORE BENCH OF THE TRIBUNAL IN THE CASE OF VIRT AY MISHRA 141 ITD 301 WHEREIN IT WAS HELD THAT PROVISIONS OF SECTION 54F DOES NOT SUGGEST THAT NEW RESIDENTIAL HOUSE ACQUIRED SHOULD BE SITUATED O NLY IN INDIA. ACCORDINGLY EXEMPTION WAS GRANTED IN RESPECT OF RESIDENTIAL HOUSE ACQUIRED OUTSIDE INDIA. IT WAS OB SERVED THAT ON A PLAIN READING OF PROVISIONS OF SECTION 54 F ONE DOES NOT FIND ANYTHING THEREIN TO SUGGEST THAT THE NEW RESIDENTIAL HOUSE ACQUIRED SHOULD BE SITUATED I N INDIA. THE WORDS 'IN INDIA' CANNOT BE READ INTO SEC TION 54F WHEN PARLIAMENT IN ITS LEGISLATIVE WISDORN HAS DELIBERATELY NOT USED THE WORDS 'IN INDIA' IN SECTI ON 54F THERE WAS NO REASON TO SHOW THAT EXEMPTION WILL NOT BE APPLICABLE IN RESPECT OF HOUSE ACQUIRED OUTSIDE IND IA. SIMILARLY THE CHENNAI BENCH OF THE TRIBUNAL IN CAS E OF N.RANGANATHAN 33 ITR(AT) 444 HELD THAT THE PROFIT ON SALE OF PROPERTY USED FOR RESIDENTIAL HOUSE (FOREIG N HOUSE PROPERTY) ACQUIRED OUTSIDE INDIA IS ELIGIBLE FOR EXEMPTION U1S.54. HOWEVER NO CONTRARY DECISION OF TRIBUNAL OR HON'BLE HIGH COURT WAS BROUGHT TO OUR N OTICE SUGGESTING THAT EXEMPTION WILL NOT BE AVAILABLE IN CASE RESIDENTIAL HOUSE IS ACQUIRED OUTSIDE INDIA. 7. THE FINANCE (NO.2) BILL 2014 BROUGHT AN AMENDMENT IN SECTION 54 WHEREIN SUB-SECTION (1) F OR THE WORDS 'CONSTRUCTED A RESIDENTIAL HOUSE' THE WORDS 'CONSTRUCTED ONE RESIDENTIAL HOUSE IN INDIA' HAS T O BE SUBSTITUTED W.E.F. 1ST DAY OF APRIL 2015. THUS IT IS CLEAR FROM THE AMENDMENT SO BROUGHT FOR CLAIMING EXEMPTION U1S.54 THAT NEW RESIDENTIAL HOUSE SHOULD TO BE CONSTRUCTED IN INDIA ONLY W.E.F ASSESSMENT YEAR 2015-2016.. HOWEVER THE ASSESSMENT YEAR UNDER CONSIDERATION IS 2010-2011 I.E. MUCH PRI OR TO THE AMENDMENT SO BROUGHT IN FINANCE (NO.2) BILL 20 14. THERE IS NO REASON TO DECLINE EXEMPTION U1S.54 DURI NG THE A. Y.2010-1 I UNDER CONSIDERATION. 8.THE PROVISIONS CONTAINED IN SUB-SECTION (1) OF SE CTION 54 OF THE INCOME-TAX ACT BEFORE ITS AMENDMENT BY T HE RAYMOND HOMI KERMANI 9 ACT INTER ALIA PROVIDED THAT WHERE CAPITAL GAIN A RISES FROM THE TRANSFER OF A LONG-TERM CAPITAL ASSET BEI NG BUILDINGS OR LANDS APPURTENANT THERETO AND BEING A RESIDENTIAL HOUSE AND THE ASSESSEE WITHIN A PERIOD OF ONE YEAR BEFORE OR TWO YEARS AFTER THE DATE OF TRAN SFER PURCHASES OR WITHIN A PERIOD OF THREE YEARS AFTER THE DATE OF TRANSFER CONSTRUCTS A RESIDENTIAL HOUSE T HEN THE AMOUNT OF CAPITAL GAINS TO THE EXTENT INVESTED IN THE NEW RESIDENTIAL HOUSE IS NOT CHARGEABLE TO TAX UNDER SECTION 45 OF THE INCOME-TAX ACT. 9. IN VIEW OF THE ABOVE WE HOLD THAT DURING THE YEAR UNDER CONSIDERATION ASSESSEE WAS ENTITLED FOR EXEMPTION U1S.54 EVEN IF INVESTMENT WAS MADE IN RESIDENTIAL HOUSE SITUATED OUTSIDE INDIA PROVIDED THAT ASSESSEE HAS TO COMPLY WITH OTHER CONDITIONS O F SECTION 54. SINCE THE AO HAS OUT-RIGHTLY DECLINED EXEMPTION ON THIS PLEA WITHOUT EXAMINING THE OTHER CONDITIONS OF SEC.54 SO AS TO MAKE ASSESSEE ELIGIBLE WE ACCORDINGLY RESTORE THE APPEAL TO THE FILE OF THE AO FOR VERIFYING OTHER CONDITIONS TO BE FULF ILLED FOR GRANT OF EXEMPTION U/S. 54 IN BOTH THE APPEALS OF T HE ITA NO. 7058/M12013 MS. DHUN JEHAN CONTRACTOR 5 ASSESSEES. THE AO IS ALSO AT A LIBERTY TO VERIFY ACTUAL ACQUISITION OF HOUSE PROPERTY OUTSIDE INDIA IN TERMS OF TRANSFER DEEDS SO EXECUTED IN FAVOUR OF ASSESSEE. WE DIRECT ACCORDINGLY.' 7. ACCORDINGLY FOLLOWING THE ORDER OF THE CO-ORDIN ATE BENCH OF THE TRIBUNAL IN THE CASE OF 'MR. GIRDHAR MOHANANI & MRS. VARSHA GIRDHAR' (SUPRA) WE DECIDE THIS ISSU E IN FAVOUR OF THE ASSESSEE AND AGAINST THE REVENUE. AO IS ALSO AT A LIBERTY TO VERIFY FULFILLMENT OF OTHER CO NDITIONS OF SECTION 54 OF ACT.' 4.3.2 FOLLOWING THE DECISION OF THE COORDINATE BENC H OF THIS TRIBUNAL IN THE CASE OF MS. DHUN JEHAN CONTRAC TOR IN ITA NO. 7058/MUM/2013 (SUPRA) WE HOLD THAT THE ASSESSEE IS ENTITLED TO BE ALLOWED EXEMPTION UNDER SECTION 54 OF THE ACT IN RESPECT OF THE INVESTMENT MADE IN THE PURCHASE OF THE NEW RESIDENTIAL PROPERTY ABROAD IN 151 WHISPERING LANE WINONA WINONA COUNTY MINNWSOTA 55987 USA. THE AO IS ACCORDINGLY DIRECTED. CONSEQUENTLY GROUND NO. 1 (1. 1 TO RAYMOND HOMI KERMANI 10 1.3) OF THE ASSESSEE'S APPEAL IS ALLOWED. 3.6. NO CONTRARY JUDGMENT HAS BEEN PLACED BEFORE US BY THE LD. DR. THUS RESPECTFULLY FOLLOWING THE JUDGMENT O F THE TRIBUNAL WE FIND THAT THE DEDUCTION U/S 54 IS ALLO WABLE TO THE ASSESSEE. FURTHER WITH REGARD TO FACTUM OF MAKING INVESTMENT INTO NEW RESIDENTIAL HOUSE AND COMPLIANCE OF FURTHE R CONDITIONS IT HAS BEEN CLEARLY AGREED BY THE LD. D R THAT THERE IS NO DISPUTE ON THE SAME. IT IS ALSO NOTED THAT EX HAUSTIVE DETAILS AND EVIDENCES WITH RESPECT TO COMPLIANCE AL L OTHER CONDITIONS OF SECTION 54 WERE SUBMITTED BEFORE LD. CIT(A) AND SAME HAVE BEEN APPARENTLY EXAMINED BY HIM BEFORE AL LOWING THE RELIEF TO THE ASSESSEE AND NOTHING WRONG HAS BE EN FIND OUT BY HIM. THUS WE FIND THAT DEDUCTION U/S 54 HAS BEE N RIGHTLY ALLOWED BY THE LD. CIT(A) NO INTERFERENCE IS CALLE D FOR IN THE ORDER OF LD. CIT(A). THE SAME IS UPHELD AND THUS GROUNDS RAISED BY THE REVENUE ARE DISMISSED. 4. IN THE RESULT THE APPEAL OF THE REVENUE IS DISMIS SED. ORDER PRONOUNCED IN THE OPEN COURT ON 30 TH SEPTEMBER 2016. SD/- (SANJAY GARG ) SD/- (ASHWANI TANEJA) ! / JUDICIAL MEMBER ' ! / ACCOUNTANT MEMBER $ % MUMBAI; * DATED : 30/09/2016 CTX? P.S/. .. #$%&'(')% / COPY OF THE ORDER FORWARDED TO : 1. -. / THE APPELLANT 2. /0-. / THE RESPONDENT. 3. 1' 1 $ 2 ( ) / THE CIT MUMBAI. RAYMOND HOMI KERMANI 11 4. 1' 1 $ 2 / CIT(A)- MUMBAI 5. 56 / 78 1' ( 78'9 $ % / DR ITAT MUMBAI 6. : ; % / GUARD FILE. / BY ORDER 0 5 / //TRUE COPY// / (DY./ASSTT. REGISTRAR) $ % / ITAT MUMBAI